How auction house RM Sotheby's pivoted from ritzy live events to selling 7-figure Ferraris online 'in a matter of hours'
- RM Sotheby's is a car auction company that has traditionally sold cars at live auctions.
- The COVID-19 pandemic put a stop to that, so it's had to pivot — hard — to online sales.
- But the company has found that buyers are still willing to purchase six- and seven-figures cars they've never seen in person.
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Picture a live car auction. What do you see? A tent or showroom, filled with chairs, and excited people milling about, looking at the cool cars for sale. But thanks to the COVID-19 pandemic, this likely won't be a common sight for a very long time.
You'd think the cancellation of live car auctions would threaten to kill off car auction houses such as RM Sotheby's. But it didn't, because the company luckily started building out its online presence and architecture in 2019.
"Last year, we had started a push to digital auctions and were trying to learn and experiment with different things and different platforms," RM Sotheby's President Kenneth Ahn told Business Insider. "So we were able to go from completely physical [sales] to completely online [sales] in a matter of hours."
When live events were canned, Ahn said it was "a matter of life and death at that point."
"If we weren't going to do live events, we'd have to go online to continue our business," Ahn said.
The company's fast digital pivot, coupled with voracious buyer appetite for cars, has seemingly paid off. From September 2019 through March 2020 — when there were still live auctions — RM Sotheby's average car sale price was $153,000. From March to this past September, when everything went online, the average sale price of a car was $148,000.
That $5,000 difference showed that buyers were still buying, despite a lack of in-person events and only having a bunch of photos to go by.
Ahn said for a true digital transition at RM Sotheby's, which has traditionally sold cars in person, the company had to go the extra mile to build up buyer confidence.
That means RM Sotheby's listings now include more high-resolution images than ever, their own condition reports, and specialists who examine the car from nose to tail in order to pull together a document of answers to questions potential buyers might ask.
Recently, the company managed to sell a Ferrari Enzo for $2.6 million, which at the time made it the most expensive car ever sold online.
Admittedly, an Enzo is an Enzo. How messed up is it going to be? But it's still impressive that someone was willing to spend that much on a car they'd just seen pictures of online, and it foreshadows a future for online auctions that even auction houses themselves didn't expect to be so bright.
"The fact that clients and buyers did not hesitate to bid on six- or seven-figure cars online, sight unseen, is amazing," Ahn said. "Whatever effort we were trying to make last year in terms of online investment and growth opportunity — this has accelerated it by two to three years."
For more on the state of car auctions amid the COVID-19 pandemic, click here.
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